CANADA FX DEBT-C$ dips against stronger greenback as oil prices fall

Reuters Staff

3 Min Read

(Adds strategist quotes and details on NAFTA talks; updates
prices)
* Canadian dollar at C$1.2334, or 81.08 U.S. cents
* Bond prices mixed across the yield curve
* 10-year yield touches more than three-year high
By Fergal Smith
TORONTO, Jan 29 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Monday as oil prices fell and
the greenback broadly climbed, while global bond yields reached
multi-year highs.
At 4 p.m. EST (2100 GMT), the Canadian dollar was
trading at C$1.2334 to the greenback, or 81.08 U.S. cents.
The currency traded in a range of $1.2306 to C$1.2361. On
Thursday, it touched its strongest in more than four months at
C$1.2283.
"What we are seeing today is primarily a squeeze on the U.S.
dollar, said Mark McCormick, North American head of FX strategy
at TD Securities. "A lot of bad news is baked into the U.S.
dollar ... we have gone too far too fast."
The U.S. dollar rebounded from a three-year low on
Friday against a basket of major currencies as U.S. bond yields
climbed and traders waited for a Federal Reserve meeting and a
U.S. jobs report later in the week.
The stronger greenback and rising U.S. crude output weighed
on the price of oil, one of Canada's major exports. U.S. crude
oil prices settled 0.9 percent lower at $65.56 a barrel.
U.S. President Donald Trump's trade chief dismissed Canadian
proposals for unblocking talks to modernize the North America
Free Trade Agreement but pledged to stay at the table, easing
concerns about a potentially imminent U.S. withdrawal from the
trilateral pact.
Speculators raised bullish bets on the Canadian dollar for a
third straight week, data from the U.S. Commodity Futures
Trading Commission and Reuters calculations showed on Friday. As
of Jan. 23, net long positions rose to 22,557 contracts from
17,556 a week earlier.
Canadian government bond prices were mixed across the yield
curve. The two-year was flat to yield 1.826 percent
and the 10-year declined 13 Canadian cents to yield
2.282 percent.
The 10-year yield reached its highest since September 2014
at 2.314 percent as investors braced for major central banks to
step back from ultra-easy monetary policies.
Canadian gross domestic product data for November is due on
Wednesday. The economy is forecast to have grown by 0.4 percent,
a Reuters poll shows, regaining momentum after pausing in
October.
(Reporting by Fergal Smith; Editing by Bernadette Baum and Lisa
Shumaker)